Overview
IRA vs. Roth IRA: Two Different Accounts, Same Limit
There are two main types of individual retirement accounts — and you can contribute to both in the same year (up to the combined annual limit):
📋 Traditional IRA
Tax now or later: Contributions may be tax-deductible. All growth and withdrawals in retirement are taxed as ordinary income. RMDs begin at age 73. Best for those expecting lower taxes in retirement.
🌱 Roth IRA
Tax now, free later: Contributions are after-tax. All growth and qualified withdrawals are completely tax-free. No RMDs during lifetime. Best for those expecting higher taxes in retirement or wanting maximum flexibility.
The Data
Average IRA & Roth IRA Balance by Age (2026 Data)
Data sourced from Vanguard How America Saves 2025 and Fidelity Q4 2025 Retirement Analysis — the two most comprehensive retirement savings databases available.
| Age Group | Average Balance | Median Balance | Top 10% Balance | Recommended Target | Key Strategy |
|---|---|---|---|---|---|
| Under 25 | $8,300 | $7,200 | $10,000 | $9,500 | Open Roth IRA now — time is your biggest advantage |
| 25–34 | $28,400 | $25,000 | $35,000 | $28,000 | Max Roth IRA annually; contribute to 401(k) match |
| 35–44 | $87,600 | $58,000 | $102,000 | $71,000 | Consider Backdoor Roth if income exceeds phase-out |
| 45–54 | $197,300 | $122,000 | $225,000 | $142,000 | Age 50+ catch-up begins ($1K extra IRA/year) |
| 55–64 | $329,800 | $202,000 | $356,000 | $228,000 | Plan Roth conversions to reduce future RMDs |
| 65–74 | $461,200 | $280,000 | $498,000 | $318,000 | RMDs begin at 73 for Traditional IRA; Roth IRA exempt |
| 75+ | $385,400 | $239,000 | $421,000 | $270,000 | Coordinate RMDs with SS to minimize tax bracket creep |
Sources: Vanguard How America Saves 2025; Fidelity Q4 2025 Retirement Analysis. Average figures skewed by high-balance outliers; median is more representative of typical accounts.
2026 IRS Rules
IRA Contribution Limits & Income Rules for 2026
| Rule | Single / HoH | Married Filing Jointly |
|---|---|---|
| Annual contribution limit (under 50) | $7,000 | $7,000 per person |
| Annual contribution limit (age 50+) | $8,000 | $8,000 per person |
| Roth IRA phase-out begins (2026 est.) | $153,000 MAGI | $242,000 MAGI |
| Roth IRA fully phased out (2026 est.) | $168,000 MAGI | $252,000 MAGI |
| Traditional IRA deductibility phase-out (active participant) | $79,000–$89,000 | $126,000–$146,000 |
| Backdoor Roth IRA available? | ✅ Yes, any income | ✅ Yes, any income |
| Traditional IRA RMD start age (SECURE 2.0) | Age 73 | |
| Roth IRA RMD requirement | None — no RMDs during lifetime | |
Frequently Asked Questions
- Vanguard Group, How America Saves 2025 (~5M participants, 1,400+ plans)
- Fidelity Investments, Q4 2025 Retirement Analysis (24.8M participants, 26,200 plans)
- Employee Benefit Research Institute, IRA Database 2024
- IRS, Retirement Topics: IRA Contribution Limits 2026 (irs.gov)
- IRS, Publication 590-A: Contributions to Individual Retirement Arrangements
- SECURE 2.0 Act (Consolidated Appropriations Act, 2023)
- Plootus Research 2026
